>> upping its acquisition game. general is said to be courted by -- $413 billion. >> apple's gift to in sisters -- investors. >> like soul around for facebook after sales and profits blow away last quarter. >> and swiss drug maker novartis shakes up earnings. we breakdown the company's earnings. hello, welcome to countdown.

i am mark barton. >> and i am anna edwards. bloomberg reporters are stated standing by to deliver the stories that will drive your day. takes a look at the most recent numbers from facebook and apple. >> here in london, manas will be covering the breaking earnings from novartis. is news -- the company unveiling deals to the tune of $28 billion. we'll come to the earnings as soon as they cross. but such a busy day. >> let's talk about the top story. in other day, another deal. eyeinggineering giant ge a french company. here on the routine million -- dollar $13 billion deal.

they want to harness this wave on focus of investment in an structure -- infrastructure. onse are companies focused building trains. jet engines, locomotives. this is also alstom's focus as well. u.s. and europe recover, they are talking about building infrastructure. looking at in january giants. this could build in engineering powerhouse. is emerging with the margins improving. one of the juggernauts in engineering. aow it is eyeing buying smaller competitor. ge trying to hone itself down and focus. it got rid of nbc universal for

$16 billion. it is not trying to reduce its dependency and go for what it is good at. engineering. jet engines. locomotives. >> some european companies have been complaining about the strength of the euro. not putting off ge right now deal.he the -- teh him -- als, oust tom's shares have decreased. this is a company having a few problems at the moment. they are trying to reshape managerially. they are cutting 1300 jobs. really reducing their debt verdant. selling assets. they have not survived the crisis quite so well. cheaper competition from china, particularly where they are strong in building wind turbines, has been hard for the company.

top competition, notably from ge itself when it comes to gas turbines and power transmission. it is a company trying to invest in emergency -- emerging markets. they need the financial strength of general electric. we have had so many deals, largely around pharmaceuticals. the novartis deal. glaxosmithkline. mergers and acquisitions up 55% from last year. european numbers are a quarter of all deals. it will be interesting to see how this goes through in terms of regulation. sometimes regulators are concerned with u.s. companies buying other competitors in europe. the french government bought into the whole notion of national champions. we will see how this goes down.

>> government officials have been approached. the biggest shareholder is up 29%. the swisss, drugmaker, has earnings crossing our terminal. benefiting from growing sales with newer products. i think it is fair to say these earnings have been overshadowed by this week's news. they announced a series of deal that will reshape the company, buying the cancer drug business for as much as $16 billion. selling the business for $7 billion to glaxo. and selling to eli lilly >>. they will film a -- they will form a consumer giant. >> let's turn to updates from silicon valley. facebook and apple released

quarterly earnings. jonathan ferro has the details. something for investors to smile about. >> on both stocks, apple and facebook. pop ink delivering a 72% revenue. the shift to mobile ads continues. both apple and facebook doing what they do and doing it really well. let's call it iphone he. -- iphoning. they have delivered six mormon -- 6 million more iphones than people anticipated. seven -- 4.7%.of this was the vest quarter outset of a holiday. ever. ipad sales down 16%. the bottom line is, the ipad, that product is contributing less to overall growth than it has in the past. that is a concern. the question over what is the next big thing? where is the next big product? that continues to be asked.

tim cook was pretty blunt. he said, it it means more to us to be right than first. >> shareholders are feeling more wealthy. let's not just gloss over that. that's $13 billion, the government of 12 months of sales at a nike or mcdonald's. then they are doing something called a 7-1 stock split. you have one stock. they give you seven. then you delete the value of a stock. it is not people's holdings, just the value of a share. that will get divided into seven shares if you have one share on what -- june the third, i believe. it makes the stop more accessible to people outside institutions. retail investors that can say, i don't need to have $500 to buy one share. the investor base.

>> reaction to the share prices clear. there are is some appetite here. the hass -- the question has to deliveredtim cook what people wanted. >> he says he will to live her product later. thank you. holding talks is with japanese leaders at the start of his four-day tour of asia. he has assured them of support in the territorial disputes with china. phil, good morning. what else is on the agenda? >> the top thing you have to look at, as you mentioned, reassuring everybody on the security side. from the economic side, all about the transpacific orders ship. the 12 country trade deal they have been working on. he had a 90 minute sitdown with prime minister abe. they came out for a press

conference. he said they are moving closer to a deal. that is top of the agenda. especially on this first trip to japan. what progress do you think we can expect on it? >> what is interesting is the hurdles are the same may have been since the u.s. and japan really ramped up their negotiations in february. it is about agriculture and automobiles. what we have seen over the last two weeks from the negotiating a major there has been push to try and make some sort hurdles.ss on the key the top negotiators are in tokyo with the president. all through last night. the president and prime minister both said today they are pushing towards a deal. will that get them there? not within the next couple of days. but it will spark something.

them an is it will give opportunity to get over the hurdles that have been sending in the way. >> this trip for president obama, the latest elements of the rebalancing, what it is calling rebalancing strategy in asia pacific region. what will it take to advance the strategy this week? startay was a positive from the administration's perspective. ministeré -- prime praised u.s. efforts. that is something administration efforts have pushed towards. there is the work that happens behind the scenes to reassure allies on the security and economic site come at the u.s. will be there for them. particularly in the face of china's rise. but the public statements as well. press conferences in each stop. speaks publicly, all of the allies in the region will be watching. they want to be sure that every thing he says is positive and

made to bolster their standing in the region. bighat happens, it is a step forward for strategy that has been resized and raise concerns in the region. >> phil met nini -- mattingly who's traveling with president obama. an eventl london -- that has become quite a media spectacle for perhaps all the wrong reasons. manus cranny is outside in london where the event is taking kreis. -- what can we-- -- taking place. what can we expect today? >> anna, good day to you. a little bit of toilet trouble outside the the building. retail investors objecting to the 9 million pounds that have been paid. inside the royal festival hall, the business will top the agenda. three vote on pay. has drawn the air

of some major divisors to the institutions. the institutions will be in the building, probably passing the report. but just think of it this way. the business secretary has said, the 100 top ceos in london -- high levels of executive pay. a lot to justify, even though he says i faced a death sub viral -- spiral. >> manus, thank you very much. we will be a active later in the story. >> concern about china. we will take a look at the biggest risk tasker's -- task -- tours -- the biggest risk factors. ♪

>> time for today's company news. general electric is in talks to buy alstom for as much as $13 billion. the acquisition would be the biggest by ge ever. after struggling to revive its consumer electronics business, sony is getting into real estate.

it will include a brokerage and property management and consulting arms. they are making an initial investment of 2.5 billion dollars. . cfo is leaving. by the cforeplaced from zynga on june the third. welcome back to countdown, i am anna edwards. >> i am mark barton. let's take a closer look at chinese stocks. they are down after manufacturing data showed a contraction. how concerned should we be? julian is here to talk about all matters of an economic nature. good to see you in your new guys. -- guise.

when you talk about the global economy, you say it is a mixed picture. but your major concern is china. >> you have to be concerned about china. the manufacturing confidence readings are tracking low. when you look at gdp expansion, it was the weakest since the first half of 2009. we are seeing some weakness emerging in the chinese economy. the housing market is also of course starting to show further signs of weakness. it is very important because magnet thaten the has been driving a lot of business confidence globally, particularly in asia. but also for firms in europe as well. a very important market. the chinese are starting to let the currency depreciate gradually. that is inevitable -- and

inevitable process. if you calculate the currency on a real basis, it is highly valued in relation to where it was six years ago, for example. about 50%. >> when you look at the chinese growth story, is it an act of faith. it is strange to look at what the chinese government is doing and have a view on it. like so many people, i find myself in a situation of assuming that china will get through this. aware thattant to be there are downside risks. we are going into new territory right now. china is not going to be the source of stimulus for exports that it has been in the last five years. the composition of chinese demand is going to be changing. it will be difficult to translate from having such strong exports -- sorry, such

strong investment driven drove -- growth into consumption. china is going to be looking to have a weaker currency. also, easier monetary conditions. to try to foster again growth in the export sector. if you look at the trade data, those were particularly soft. disappointing really in the first quarter. i know about the phantom invoicing going on. which is relating to trade with hong kong. if you look at the import data, they are very soft in the first quarter of this year. >> you mentioned the chinese housing market. the u.s. housing market could be losing steam, some say. his history to look at the -- especially if you look at yesterday's home sales data. >> mortgage rates are higher than they were a lot -- of may last year. that is what happened as a

result of the fed starting to talk about tapering. affordability has significantly weakened in the u.s. housing. prices have risen significantly. didion home prices are up 12%. >> it doesn't take a rise to raise rates. >> the only thing i would say is to thef that reaction steep rise you had in mortgage rates, which was happening in q3 last yearee -- -- we will not see much further weakness. i am optimistic this will be a but of a turning point, a base for summer nude pickup. the effect of that mortgage increase -- unless they shift operates more -- the market might start to base more on fundamental factors like full unemployment. come back, the euro

zone economy. stay with us. it is 20 past six in london. ♪

>> welcome back to count in -- countdown. i am mark barton. more on today's news. german business confidence data.

the first fall in a month. what will today's data tell us about the ultimate germany and the implications for policy in the eurozone? attributedness was to business implementations -- conditions. it is important to bear in mind that russia is a huge market for germany. that basis, i would not be surprised if we see a little bit further weakness come through. i think it will probably be more in the expectations component. reading was around 106.4. we are at high levels. it wouldn't surprise me if the overall index and expectations component drift a little big lower -- a little bit lower.

which is reflecting geopolitical risk factors, an important source of future risk coming through to the euro zone economy. >> what will be the trigger if you like that gets the ecb to do something? >> rather than talk about it. changinggoing to be their own inflation targets? or weakerd knows -- news out of the german economy? >> the inflation thing is crucial here. euro zone inflation will average 0.7%. there's a chance it could be 0.6%. we see big falls coming. therefore, the ecb will have to lower inflation target significantly. i think the inflation forecast will be cut from one percent to down to 0.8%. something similar for next

year's forecast by the ecb staff . that will be published in early june in their meeting. on thets the burden focus to do something. the obvious thing is to lower interest rates. there talking more about a negative deposit rate. you have had comments by various they should i think do this. the euro is still on the strong side. it is the key factor that has been pushing inflation down. is the key restraining factor for the economy. i think the indications at the recent imf meetings are they want to put a cap on the euro. >> will they succeed putting on that cap? >> they can if they are heavy enough. i'm not at all sure they are going to go that direction. certainly, they're going to have

to follow it with some action. >> thank you, julian. 6:26 ine six: 26 -- london. ♪

>> welcome back to "countdown." i am mark barton. edwards.nna >> the new zealand dollar is up. the tightening cycle over new zealand began last month. after three years of record lowing, investors suspect more hikes of not less. there is a mistake consumption that is on the rise. you have got a central inc. -- bank. this is a country that all

mandates a market -- dominates a certain market. now, this is the currency so far this year. there is a good 12-18 months ahead of the fed and the bank of england. president goes on trial today over allegations he paid a bribe at the racing series. the judges have found that he made illegal payments to a 1rmer -- he has run formula since 1985. they will begin regulating the sale of e-cigarettes in the u.s. they will not be subject to the same van that applies to tobacco products. consumer groups say that e-cigarette users offer candy flyers. u.s. president barack obama is in japan for a meeting with the

japanese prime minister. they will listen and assist on time in there -- they will place an emphasis on china in the region. >> international monetary fund endorsed a loan for ukraine. the loan is meant to stem budget deficits and the economic contraction. ryan chilcote has the details. >> coming up from the imf news yesterday, they are going to support this loan. it is from the staff. they are supposed to rule on that. we are hoping to get the ukrainian minister on. >> nothing at. -- yet. ok. you for joining us.

i want to start with congratulating you on getting the $17 billion. the yuan tend to use some -- do you intend to use some of that to pay down the ukrainian debt to russia? that is still under discussion. this is also the subject of discussion. >> the russians have said if you do not pay some of that debt by the beginning of next month, that might turn off -- >> these are part of the discussions. the imf have said that they

expect the ukrainian economy to contract by five percent. that is much more pessimistic than what ukraine itself had said. >> it is more than we forecasted. we are working on ways to ukrainianthe country. aswant tiit to grow as soon possible. we started this role of regulation and fundamentals so we can

start growing. resumed its -- this doesn't present for your country? -- what kind of wrist as this present for your country. thatwe have tensions like -- >> president obama said sanctions against russia are all teed up. it is a matter of days and not to ds clay pit are you happy with the response you have seen from western countries in terms of the pressure they are putting on russia? not sanctions.

the integrityhat and independence. these guarantees -- >> we will have to leave it there. hopefully we can talk to you again next week after the imf considers that $17 billion loan. thank you for joining us. >> ryan, thank you to you as well. , we take a look at some of the questions overpay in the face of disappointing performance. ♪

>> time for today's company news. there are weaker currencies in japan and emergency markets weighed on sales. stream --soda starbucks is in talks to buy

stake in the company. starbucks is in talks to acquire 10% stake in the company value of $1.1 million. coca-cola plan to pay employees with stock. we speak with betty liu in new york. >> it is a vote of sorts. i voted enthusiastically for the directors. i certainly am enthusiastic. being the ceo, you cannot have a better ceo. the plan was excessive. they talked about 500 million shares in using them up over four years. it was excessive in my view. i abstained. i can never vote against coca-cola. >> and supporting an equity plan. welcome back to "countdown." i am mark barton. edwards.na

is in london. he is standing by with an analyst but today's meeting into percent for us. manus? >> thanks for that. strategy big investor on the 8th of may. wilco we expect from the agm? -- what can we expect from the agm? what is at the heart of the issue? >> good morning. the real issue is that clearly he talked about moving towards a 35% conversation ratio. he also is expecting revenues to go up. they didn't. unfortunately, that went up to

goodthink many could see reasons why he had to do that. clearly in, from another perspective, or haps more money is going to the employees and it is the shareholders. is what is wrangling some of the key institutions. will they vote for this policy that will be put in front? last year's bonus, forward-looking bonus, and the eu cap. will it pass? >> the two-time salary bonus will go through. through, two will go but there will be a protest vote. that would really be about something has to be done about this. willnk that is when they want to give more details on what they intend to do about it. >> what do they need to do. it is going to continue to

change. has he got a deal with a big structural change in the business? >> yes, think he has cut a deal with that. , do you start cutting go into the flesh? that is a problem his to deal with. to get himself the kind of profitability levels that i think he wants and investors want, it will have to be quite semantic around the extent and come space. -- welooking at it to be have got to go into the muscle. the top layers. there have got to be some pretty big pieces. >> yes. i think it sounds fairly high indeed. thisally if they do that,

25,000 in the investment bank, or a lot of people as well as people dealing with clients. it is not easy. think the important thing here is that -- do they want to stay a global leader? we haven't slowly and surely even got to the u.s. banks. credit suisse and ubs have made changes or in the process of making changes. is that what the institution wants to see them deliver? >> that is a tough question to answer. people want to see profitability of that to come through. i think a lot of u.k. institutions are concerned that they will not have a big u.k. bank services that barclays does. , it is important

for the agendas will. >> yes, indeed. we will have to make some big decisions about the network and the underlying costs there. >> great to have you with us. wheeler with med iobanker. i'm waiting for the joggers to come past. they're looking very energetic. [laughter] kettle -- black. [laughter] shall we move on and talk about technology? >> yes. enough to restore investor faith intact.

joinede analysis, we are with our guest. great to see you. try to dig into the apple numbers a little bit for us. ted to give us some clarity around what we are seeing in the market. i think there are two areas where investors will be relieved on the apple numbers. is very healthy beat in terms of iphone shipments. a nices given you revenue line. the second thing is people were word that guidance is going to be a little bit soft. everyone is talking about this iphone six and the bigger screen, etc., etc. they're worried more people than usual might hold off on buying a new iphone before the new one is

available. that could cause the next weaker thano be what people were looking for. it was actually all right. estimates have come down. i think that where he was nicely contained. what you will see in apple now is i think a relief rally that will not be a big one. same.en more of the it is struggling to find growth. >> ok. tim cook seems to be delivering at least from an investor perspective, he is delivering a balance sheet. he is delivering more money to investors. there is a very different approach. what will you deliver -- what will he deliver in terms of new products? that is what investors will look at. are you holding out for tv? what kind of innovation?

a watch? what will it be? in the always happens situation is everyone speculates like crazy. but when the products him out, that was a bit boarding -- but when the products come out, it was a bit boring. they are focused on providing exclusive content. it is a hint at a bigger push on the tv side and it has been a bit of a hobby really. the other is the iwatch. thats wearable watches is solution him looking for a problem.

>> and now presents an growth rate. >> yes. it is not actually a growth rate. is you going on here look at the traffic patterns. it gives you a better idea. it has been moving to mobile for a long period of time. the ability to monetize that traffic was very poor. what have done is put the mechanism in place to monetize it. the reason the revenues going quickly is the company is catching up on the revenue that it missed out on. forward, i think there's still quite a lot of growth left in that revenue stream. monetized, not fully that opportunity. again, look at where

expectations are and where evaluation is. you start to be worried. when does this come any -- company start slowing down? finishede company doing deals for now? they have been some big ones and small ones over the last quarter. >> i wouldn't necessarily call $2 billion a small acquisition. in terms of their cap, it is a small acquisition. whatsapp wasd for quite frankly extremely high. this brings me back to my old chestnut which is the corporate governance issue. -- theygement of this basically have a blank checkbook with no accountability and there's nothing anyone can say about it. i would hope acquisitions have stopped, but we will see. >> thank you for joining us. >> 6:50 a.m. in london.

toing up, a performance celebrate shakespeare's anniversary. that and more in "countdown" newspaper segment. ♪

>> all combat to "countdown." -- welcome back to "countdown."

i am anna edwards. i am mark barton. let's talk about shakespeare. they are celebrating the bard's buirth/ -- birth. what also happened was a performance of shakespeare on a plane. it was between gatwick and verona. they called it shakes on a pl ane. [laughter] >> i did not know what happens if there is turbulence. maybe there wasn't any turbulence. >> they may shakespeare play -- favorite shakespeare play? >> "romeo and juliet." >> my son was in it. there. my story >> it was from our interview

yesterday. >> i wanted to talk about the bottom of the page. the interview at the top was stellar. wendy's and burger king introducing apps so the customers can pay for their whoppers and respective burgers at those two chains. analysts say they're not as good as starbucks. starbucks is the leader in this field. >> they are not that big in the u.k. yet. we should tell everyone, can you pay here? >> not yet. >> you just scan the barcode and it is done. at wendy's, yet to put in a six digit code. >> lots of cases already. ling -- trialing it. >> if you're going to do the wendy's one -- i have the fat fingers problems.

six digits, i would never make it. >> it will be the future. >> it is already in the united states. many transactions go through the phone. >> go, go. >> going to the library is equivalent to a pay raise. i love this. just going there regularly, it is equivalent to a 1300 pay rise. a gym is negative. gym.y i don't go to the >> very quickly, so much the holdup. semi finals. won it 9 times. they are the champions. the return next week. >> ok.

"countdown" continues in the next hour here in stay tuned. we'll have plenty of news. ♪ .

g.e. is said to be in talks to buying france's alstom for a possible $30 billion. > apple's gift to investors. iphone shares get a $30 boost to their payout program. and in drugs news, astrazeneca is the next to report. it is breaking now on the bloomberg terminal.

we have already heard from novartis this morning, which saw rofits little changed. >> welcome back. this is countdown. i'm mark barton. >> i'm anna edwards. 're going to be delving into astrazeneca's numbers. we'll also get numbers from unilever as well this morning. growth 3.6% against an estimate of 3.3%. >> astrazeneca, still awaiting the results. the earnings have been overshadow by talks between it and pfizer according to people familiar. these talks that happened a month or two to go.

they didn't lead anywhere. the question is now what will astrazeneca do next? will pfizer come back and possibly enter into further talks with astrazeneca? as soon as the earnings cross, i'll tell you all about it. >> m&a in another space. another day, another deal. this time it is industrial with u.s. industrial giant g.e. said to be eyeing up france's alstom. if it does transpire, it looks like it would be a little bit of a surprise to alstom. >> it would be. they said we have not been informed of any bid yet. they said they are constantly reviewing their strategic options. bloomberg spoke with a spokeswoman from alstom yesterday. she said they are groundless

umors. this would be g.e.'s biggest ever deal to go through. it tried with honeywell a couple years ago and it didn't go through. many feel people familiar that they have been eyeing up alstom, building an engineering powerhouse. the timing is right. economy is turning around. the government wants to put money into rail and infrastructure. this is something they are very good at. turbines, wind turbines. power transformers. this is where the money is meant to be spent. >> money spent overseas means you don't have to repatriate it

to pay taxes. the timing looks good for alstom, doesn't it? it went through a difficult financial crisis. >> it did. the shares are down. there is plenty of competition from china, particularly when you look at wind turbines. they are having to sell assets and cut costs. they have a huge debt mountain. this is not a company that has fared particularly well whereas g.e. is. 46% of their sales is in therm owe power. 1/3 in transport. it is not a leader in many areas. it is a leader in turbines for dams. everyone wants to be a top ranking company. >> novartis said you need to be one, two or three in what you're

doing otherwise describe >> win or go home. g.e. is very strong in locomotives already. it would build on their experience. we'll have to see whether it goes through. >> they seem to be far away from company. >> good news for the tech sector. who would have thought here. you have revenue on facebook jumping by 72%. that is a remarkable return. they are getting more revenue from mobile advertising. a big tick for facebook and for apple. iphones. 6 million r more than the estimate yesterday. the fears about flat revenue, forget about that. 4.6% revenue growth and 7% profit growth.

it wasn't just about how many iphones they sold. it is about where they sold them. china, india. not all good, though. ipad sales 16.35 million. that is a 16% dropoff. the execs put a big spin on this, it was about which channels they were selling it in. that one product is contributing less to the overall growth of the company. when is the next big thing coming? tim cook's line. >> you stay next big thing. it might be a bigger screen. >> if people are concerned about ipad sales or where the next product is coming from, tim cook is trying silence his critics among the investment community. >> they are doing a 7-1 stock

split. this doesn't dilute shareholders' holdings. what it means is if you have one share, on june 2, by the market chose, you'll get seven shares to the equivalent value of that one share. the idea behind this is apple's share price had been around $525 yesterday. if you get seven shares equal to the one, you'll be able to buy a share for $75. it opens up the potential buy somewhat. >> the speculation is that apple could be included on the dow jones. >> this is something that helps them do that. >> the dow jones is a weird index. it is price bid the value of the individual stocks. it was too expensive. does 75 get them in there? that is a bit of a question mark. the current stock price does not

reflect the company's value. the share price is moving in afterhours quite highly. >> i liked the chat with richard windsor. he said quit making deals. don't like the deal. get a grip of the deals. >> he wasn't quite so impressed as some have been. it was a big price tag on what's an, wasn't it? -- whatsapp. >> jon, thank you very much. >> the barclays, an event that has become a media spectacle over the last couple of years but for perhaps all the wrong reasons. manus cranny is outside the royal festival hall in london where the event is taking place. good morning. what can we expect today? >> very good day. i think a great deal of retail ambassadors turn up to these

a.g.m.'s but more and more analysts turn up to these events. it is an opportunity to ask questions. there will be the housekeeping stuff that goes on and the renew mexico vegas top of the agenda for anthony jenkins. ast year's bonus pool went up. the pay on policy and the e.u. bonus camp giving the ability to ay more than twice the salary. a number oven vestors have objected. whitehall, government, just up the road here, vince cable saying to the top 100 c.e.o.s in london. high pay levels is dereliction of duty. they said the bonus pool that is being paid out is three times that being paid in dividends. jenkins has rolled the dice. uped the bonus pool to hold on the talent.

so goes the theory. >> on the the whole subject matter, what does the city make of this issue and jenkins' handling of this situation? >> the handling of it has been seen as being awkward and difficult. he is prepared to raise the bonus pool. a lot of that in america, a lot of it is going stateside in terms of the number of millionaires, people paid more than a million, up 12%. i think there is a general view that he set targets marked that we're going to be pretty darn tough to make. he sent a return of 11%. the business landscape has structural changed under jenkins' feet. he set a compensation target of 35% within the investment bank. bang. revenues went down and his

costs, his compensation costs went up. heading to 43%. we caught up with chris wheeler earlier. he said the perception is that they are not in control of compensation ratio at the investment banks. that is very different to what a lot of people are saying, he is not in control of the bank. a great deal of money has been paid to the american employees. that is where the skew is, mark. that is the landscape. do you hold on to talent in the hope that the revenue comes in and then you can justify the renumeration. >> astrazeneca earnings have crossed. first quarter earnings miss estimates. like many in the industry, it is suffering from competition from generic drugs. the big news for this company of course this week according to

people familiar, pfizer and it were in talks but those talks didn't amount to anything and nothing happened. they could resume, some say. we'll see if they do. that is going to be the big issue surrounding astrazeneca. will it be the target of pfizer again or maybe another company? >> coming up on the program, als worth $28 billion on tuesday. much more on the drug sector when we come back. ♪

>> time for today's company news. g.e. is in talks to buy alstom for as much as $13 billion. alstom released a statement saying it is unaware of any bid. they are a french-based builder of trains and power plants. sony is getting into real estate. the new unit begins work in august. sony is making an initial investment of nearly $2.5 million. facebook's c.f. sombings leaving the company.

this comes as facebook's first quarter sales and profit blew past estimates. david ebersman through the latest i.p.o. in may 2012. he will be replaced by former zenga c.f.o. on june 1. >> welcome back. this is "countdown". i'm mark barton. >> i'm anna edwards. novartis announcing three deals worth $28 billion. we just had earnings from novartis and astrazeneca. we take a look at the changing landscape of the pharmaceutical industry. good morning, sir. thank you very much for joining us today. >> good morning. thank you for having me on the show. >> i think we're going to overlook the earnings just for the time being and focus on events that took place on tuesday, particularly when it

comes to novartis. it is certainly a pharmaceutical industry that has been reshaped. is that for the benefit of investors like yourself? >> yes. novartis is actually our biggest holding in the fund. we like it. we think that the pipeline is grossly overlooked by the industry, and of course the deal that was struck with glaxo, eli lilly, the beginning of that deal, a couple of months ago only adds to our feeling that this is a stock that is going to outperform the market. >> as the stock that is doing ok, isn't it? shares up 7% in 2014. they reached an intraday record on tuesday. how much further upside when you're trading on 16 times imed earnings and you're resting around record highs anyway?

>> let me give you an idea how high this stock can go. about a week ago, they succeeded in a phase three trial in a drug that was completely not numbers of analysts. it could be a $10 billion drug driving their profits up by 15%. that was completely not in the model. another thing that we should take into account is that next year, they are supposed to have their biggest drug lose the patents and the way we see it is it is just not going to happen. i think there is some legal complexities. so again, we could see in the next couple of years, profit being restated by up to 20%. >> we spoke to joseph gimenez, the c.e.o. of novartis right after the deal broke on tuesday. he said you need to control a narrow market with high growth

potential. you have to be number one number two, number three in your segment. is that the news within the pharma industry? >> definitely. you want to do what you do best. if you look at novartis, they have been grappling with diagnostics, vaccines and pharmaceuticals for the last couple of years. they have been unable to bring -- of course animal health. they have been uneable to bring these industries into profitability and the sensible thing to do was to swap it for an ais the they know how to do best, which is oncology. they are the second largest oncology company in the world after rarb. -- rauch. you have seen an asset swap. they just don't know how to manage for an asset they know how the manage very well. it is a win-win for everyone. >> talk to me about the astrazeneca-pfizer talk. they were in talks, informal

talks a month or two ago. they didn't lead to anything. would pfizer come back and make an approach? could astra seek to merge with another partner? could pfizer end up pursuing somebody else? some say bristol meyers squib is more suitable for pfizer. potentially we have some m&a that could be taking place soon. >> so i think first off you to talk about pfizer. the things that pfizer are looking at just tells you how much of a problem they have in pipeline. they virtually have almost no pipeline. astrazeneca ew c.e.o. did not come to sell the company. he came to build the company. you see that by the huge amounts of deals he has been hague. i would be very surprised to see him sell the company in the next

few years. i don't believe we'll see a deal to sell astrazeneca. bristol meyers, they have p.d. one coming. the most exciting asset in the pharmaceutical industry. why would they sell now? maybe hope to get a higher price. i'm afraid i have to say know in both cases. i don't see that happening. i don't see bristol meyers or -- astrazeneca being sold in the next two to three years. >> this is an industry we're going to be focusing on again and again. >> 21 minutes past 7:00 here in london. coming up in japan, a tour of asia gets underway. more on that next. ♪

>> welcome back to "countdown". i'm anna edwards. >> i'm mark barton. president obama is holding talks with japanese leaders at the start of his four-day tour of asia. if he will mattingly is traveling with the president. phil, what else is on obama's agenda? >> i think as you pointed out, the insurances on the security side are one of the most important parts of the trip.

the president had a 90-minute sit down behind closed doors with prime minister abe. they are working on the 12-nation trade pack that has been hung up on a few issues. they are trying to nudge that forward. >> what progress can we expect on the t.p.p.? >> they said there has been progress made. behind the scenes officials tell me that the progress is limb. it is not quite there yet. the hope is when negotiations heated up a few months seeing that by this trip they would have an outline agreed on. they are not there yet. however they negotiated through the night yesterday and through the night today and i think perhaps the expectation is they will spark something to move forward. it is on automobiles, agricultural issues, market access. the hope is with the pomp and circumstance that surrounds

this, maybe this can push them forward a little bit. >> can obama rebalance his relationship with the asia pacific? which is one of the main purposeses of this trip? >> at least the first day perspective as much as you can judge it, administration officials feel good about where they are. it is a positive thing to push that narrative forward. each stop i think the administration thinks they can make incremental progress to bush back on concerns about the rebalance, if not advance it forward. >> thanks, phil. good to chat with you. phil mattingly who is traveling with president obama. >> coming up, the i.m.f. approves a loan for you crane. we'll have more on this developing story with ryan chilcote when we come back. it is 7:26 here in london. we'll be back with "countdown" in just a couple of minutes.

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>> welcome back to "countdown." i'm mark barton. >> and i'm anna edwards. let's get to jonathan ferro for the fx change. >> on the move by 1/3 of 1% today. just coming off the day's highs. the cycle began last month continues this month after three years of record low borrowing costs, the central bank is starting to get a little bit more active. there is a big rebuild going on, particularly in cheist church. -- in christchurch.

at what point does this become a concern for central bank and its appreciation? the chief throve said he is keeping an eye on the appreciation of this. >> thanks, jon. formula one president bernie eccleston goes on trial today er allegations of bribery to facilitate the sale. eckle stone has run formula one since 1995. the u.s. food and drug drug administration says it will start regulating the sale of e cigarettes. they won't be subject to the same tv tpwhan applies to obacco products. u.s. president obama is in japan meeting with japanese president

hinzo abe. there will place an impact on the influences of china in the region. >> the international monetary fund staff have endorsed a $17 billion loan for you crane. -- ukraine. prompting russia to call the move a crime and warning they would protect their citizens in ukraine. >> the ukrainians resumed that push in the east of the country to dislodge the separatists that have seized government headquarters in 10 cities. ukraine say there are about 1,300 of these armed separatists. they did that last night. the last time they did it was before the easter weekend over which they had a pause in their military activities.

thearp disarmed by the separatists. we have that on the wayened we the russians reiterating a threat to respond to any ukrainian military action in the east of the o country. the russian foreign minister appeared on tv saying any threat of violence used against russian citizen, some of these people on the east of the ukraine could also be russian citizens. russia would protect its legitimate interests. then you have you the u.s., president obama, we had phil talking about him 10-15 minutes ago. he also used his press conference with abe today in japan to warn russia sanctions could come in days, not weeks. >> are we inching towards a bigger standoff between russia and ukraine? >> it certainly feels that way. interestingly, we had that

geneva accord on thursday. it looked like it was going to save the day. i remember seeing the foreign minister looked like he was ready to kick himself, he was so pleased and surprised by the development. by the beginning of this, people are starting to have their doubts. they say if, for example, ukraine was to -- they don't even recognize the current ukrainian government. as long as it is in power -- >> what's happening the i.m.f. program? >> we have learned the staff of the i.m.f. has recommended that the i.m.f. go forward with hasasing the $17 million it been planning to give them now. the ukrainians could use the help. bond yields at a one-month high. russians affected. they had to cans albond sale

yesterday. the stock market down yesterday, really affected by all of this. elliott gotkine has more. is this the final nail in the coffin of n the current round of peace talks? >> one of many nails. many people saw these u.s. mediated peace talks as being doomed from the start. certainly they appear to be headed for o bolivian for the last few weeks. israel reneging on the release of palestinian prisoners. israel's right wing housing -- more housing in the west bank. it didn't look particularly -- things were looking pretty bleak. now you have the prospect that if this approach goes forward and there have been some attempts to do so that have done nothing in the past, if it goes

forward, you hamas forming the palestinian authority, hamas, which is considered a terrorist organization by the united states, by the european union, by israel, and which refuses to recognize israel's right to exist at all, let alone the west bank. things don't look great from that perspective and prime minister netanyahu didn't seem pleased with the agreement either. >> we're trying to relaunch negotiations with the palestinians. every time we get to that point, they stack on additional conditions. instead of moving into peace with us, they are moving into piece with hamas. he has to choose. do you want peace with hamas or israel? you can have one or the other. >> elliott, is there anything positive to take away from all of this as far as prospects for

peace with israel go? >> on the face of it, no. if you take a step back if, you're an optimist and take a long-term view, you can look at it this way. there is not an agreement but like an understanding between israel and hamas now which rules gaza in the southwest of the country. launch rockets't into israel and israel doesn't militants. as they have been trying to prevent other militant groups from doing so. you could foresee a situation where maybe hamas forms part of a palestinian authority or government in waiting and if it doesn't explicitly recognize israel's right to exist, perhaps stops calling for israel's destruction. 4 i think, ultimately, israel

realizes it can't form a deal with the palestinians without hamas' inclusion. >> thank you. our middle east editor, elliott gotkine. >> bernie eckle piston is in a bribery trial that may spell the end of the 83-year-old's car racing career. david tweed is in berlin. david, what are they actually doing? >> the whole case revolves around the $44 million payment . at was made the an executive it was designed to actually smooth the sail of the that they formula one. gribkowski was found guilty of

accepting this bribe and got 8 1/2 years in jail for it. >> what duss eckle piston say bout it? -- what does ecclestone say about it? >> te said it was part of a shakedown by great britainkowsky. gribkowsky. the issue for ecclestone is that there was a u.k. civil trial that exonerated him of planning a bribe. the u.k., when they -- when the u.k. judge said that bernie ecclestone himself had been guilty of making a corrupt payment and that he wasn't a reliable witness. >> if he is found guilty, what would it mean for formula one?

>> well, for formula one, it is not good. they would probably be obliged down ecclestone to step as the chief executive and he doesn't have anyone to take over. he doesn't believe in career planning. then again, he admitted to making this one rather not very kosher pame and that doesn't say the a lot about his integrity when he is running this sort of business. >> we'll watch that story with interest. theome up, we'll how is you latest power climb in macao.

>> it is time to look at some of the most compelling images of the day. now a former mexican sports commentator estimates he spent more than $75,000 collecting world cup memorabilia over the last few decade. he has 1,500 world cup

figurines. dozens of stick er albums, t-shirts and medals. some of his collection dates back as far as 1960. the french climber known as the french spider-man climbed the macao -- macau tower. his other notable climbs include the empire state building and the tower in malaysia. australia's knick fanning won? australia this week. wonas the third time he had the catastrophe. -- the trophy. welcome back. this is "countdown". i'm mark barton.

>> i'm anna edwards. i always thought that about surfing. you have to do it in dreadful locations. australia, rio, hawaii, california. you would not catch me there. let's look at some of the top themes of the day. we are going the talk briefly loobt germany and draghi and then move on. >> german business confidence out today. just can't seem to get away from 1.38. draghi talks in holland today. will he continue to try and talk down the euro? that is certainly something to watch. my interest takes me further south. >> where they also have a bit of a problem with their currency. >> they are tightening policy. it started last month. it has continued overnight. it is a process that began 12 months ago. they started using what

everybody is talking about. essentially they were trying to calm the housing markets. you have these high loan only 10% of morning loans can be at 80% high loans valued. 80% of the value of the morning can only be 80%. anything more is capped at 10 preponderate. you see house prices in new zealand start to trail off. bottom line is six months later, they have actually started putting up rates. why is this a lesson? they are talking about solving the housing problems with macro potential talks. there will be a lot of people in new zealand with floating mortgage rates and they will be getting decimated this year as the central bank continues to put up rates. what does this mean for the housing market going forward? >> there will be a lot of people watching. it is the first -- >> 12-18 months.

>> it is happening already here with the mortgage market review which comes into effect now. there will be stricter conditions when you apply for a mortgage. you'll be asked more questions. they are all right starting to rise. no point moving after it happened. it is already moving. >> today's big corporate story is what? m&a in drugs industry. a couple of the big players have released results today. >> they have. we can see novartis be pretty much unchanged if not down a little bit. first quarter profit little change. on the upside, new drugs, the likes for multiple sclerosis, medicines up 17%. on the downside, you're not getting so much bang for your buck in terms of overall problems to the americaning markets.

astrazeneca missed stims but is sticking by its full year guidance. >> the big shoes in the m&a of course. give us a sense how many deals have taken place and how big they are. >> it is pretty phenomenal. we are on course for the busiest 12 months in pharmaceuticals m&a in five years. $141 billion has been done in deal making. it is buying, selling, whatever. look at all the buying and selling that has been done this week. novartis among them. three big engines it is going to focus on, pharmaceuticals, eye care. buying $16 million worth of reatment from glaxosmithkline. joining the consuming unit glaxo. it has been fueling this speed-up in m&a. some of the biggest deals, and nt anding aer --

llegran was this week as well. these are some of the biggest deals. >> not over. citigroup says look, we were talking about the speculation of pfizer buying astrazeneca. they expect fieser to approach again. look at shire, an irish-based company. their bottles, by the way, look like sun lotion bottles. i think it looks like sun lotion. have much we do more intelligent things to talk about too. we're less than 10 minutes away from equity trading. one stock we're going to be

watching is -- david will be here in a couple of minutes. ♪

>> welcome back. this is "countdown." i'm mark barton. >> i'm anna edwards. let's talk about alstom. how shy this share going to go at the open -- high is this

share going to go at the open? >> you don't actually know -- they are about 29% at alstom. this is oh, so french, isn't it? it is typical. maybe the shares will go up 5% or 6% this morning. astrazeneca last week, bang, it was up and everybody looked at each other and said is this deal for real? you could not see why pfizer would want to buy astrazeneca. >> it has people talking. will they come back? will they buy bristol meyers? >> certainly i think it really shook the trees in the deal with novartis. everybody is focusing on what they are good at. to get back to the $13 billion potential bid, it makes sense.

i think they are they struggled if you look at their share price the last three or four years. to maintain -- the multitask company in the world. i think when you think of the quality, the share price has -- it is a really positive move. >> you wonder what the french government would say if approached. they bailed out 10 years ago. >> the trouble with the french is they have too many fingers in too many of their big companies. hey really need part of the -- dinee the holland dynasty. they got out of credit agricole. they need to learn what free enterprise really means. i think it would help. >> question on manchester united. got to throw one in. is there any excuse -- is the

financial model creek? >> two years ago, 700 million pounds in debt. billion dollar i.p.o. still about 90%. debt down to 380 million. that is still astronomical. then of course they are going to miss out on 25 million by not being in the champions league. whatever you think how badly david more its is treated on -- moritz is treated. florida, the tampa bay buccaneers and all of these other things, scowled consumebly be hemorrhaging all over the place. >> good luck. i hope you stay up. >> thank you very much. >> "on the move" next. all the stocks to watch.

busy day today. we'll be keeping a close eye on alstom. >> keep an eye on the drug stocks. plenty of results out. short break here at bloomberg. "on the move" is next. ♪ . .

>> welcome to "on the move." i am francine lacqua. we are just moments away from the start of european trading and our markets team has everything covered from companies to currencies. here with me now, caroline hyde and jonathan ferro. manus cranny also joins us from outside barclays in london. jon, let's kick things off with you. what are futures indicating? whack they were higher this morning. if you were concerned about flat revenue -- they were good.

much better numbers. 43.7 million iphones sold. big numbers from apple. >> our main corporate story of the day is the surprise announcement, a beautiful bloomberg scoop not confirmed yet, but ge looking to buy alstom. >> alstom denying it. we have written up that general electric is buying off alstom for $13 billion, a 25% premium. while we see the economy turn around, governments will see infrastructure. these two companies join together for an engineering powerhouse. all about trains, roads, turbines, power. ge has a huge amount of cash. >> i love this story because anything that takes -- has a french takeover, there is the government beingte